More Money, More Power for Asian Militaries

Asian countries ramped up their defense spending in 2013, while military budgets in the West continued to dwindle as a share of the global total.

The Asia-Pacific region accounted for 24% of the $1.538 trillion spent worldwide last year, according to an annual defense budgets review published by IHS Jane’s on Feb. 4. After five years of declines, global defense spending will rebound modestly to $1.547 trillion this year, the report forecast.

The review by the U.K.-based defense analysis company tracked military expenditures in 77 top-spending countries.

By the end of the decade, it predicted, Asia’s share will have risen to 28%, highlighting an eastward power shift as Western budgets stagnate and Asian budgets continue growing.

Japanese Ground Self Defense forces’ helicopters fly over tanks during the new year exercise in Narashino in Chiba prefecture, suburban Tokyo, on Jan. 12.

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The U.S. still spends far more than any other country – $582.4 billion – but its share of the global tally fell to 37.9% after peaking at around 42% in 2010.

China’s consolidation at No. 2 after the U.S., comes as no surprise. Beijing has been increasing its defense budget by around 10% a year, propelling its latest military spending to $139.2 billion, according to the report.

Those outlays came to more than half the Philippines’ gross domestic product of around $254 billion, making the country’s $1.8 billion defense budget look minute at a time when it’s locked in a tense territorial dispute with Beijing.

The disparity underscores the uneven military might between the two countries, and raises questions about how the Philippines would defend its maritime claims in the South China Sea should China decide to use military force to assert its ownership over the disputed waters.

By 2015, IHS Jane’s predicted that defense spending in China would trump that of the U.K., France and Germany combined, but increases may be pegged back to keep pace with slowing economic growth. China’s GDP growth slowed to 7.6% in 2013 compared with consistent double-digit growth for most of the previous two decades, and growth rates will probably fall still further.

IHS Jane’s forecasts China’s military spending at $159.6 billion in 2015, which would equal 7% increases for each of the next two years.

A Chinese-made Chengdu Jian-J7 fighter jet on display at the People’s Liberation Army Aviation Museum in Beijing.

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India’s economic growth also slowed last year, to around 4.5%-5%, compared with 6%-10% in recent years. Even so, New Delhi – understandably reluctant to fall too far behind neighboring China, especially amid tense border disputes – decided to scrap a plan that would have slashed military expenditures to even out its federal budget deficit.

It spent $46.2 billion on military outlays in 2013, about one-third the amount spent by China.

Japan, too, joined the regional trend, increasing its defense budget to $58.6 billion after a decade in which such spending had more or less flat-lined. Like India, territorial disputes with China appeared to be a significant driving factor.

South Korea (10), Australia (12) and Taiwan (16) rounded out the Asia-Pacific entries in the top-20 list of global defense spenders. Taiwan’s budget, at $14.8 billion, is now a tenth the size of China’s, down from half in the early 2000s.

While no Southeast Asian country made the top 20, increases are also occurring there. Indonesia, one of just four G20 economies that did not feature in the list of top 20 spenders, should break into the group within the next few years, as Jakarta pushes to modernize the country’s outdated armed forces.

A weak rupiah will make it difficult to buy foreign equipment in the short to medium term. But plans to grow this year’s budget by 9%, to 88.4 trillion rupiah ($7.3 billion); maintain that level of growth; and restore the value of the rupiah should eventually make up for the defense budget’s decline in dollar terms.

Singapore, which remains Southeast Asia’s biggest defense spender, was just outside the top 20, spending $9.7 billion last year.

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